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Repair

From Diablo Wiki

Most weapons and armor in Diablo III need repairs, after the hard use they're put to slaughtering the demonic hordes. Repairs can be done with most NPC merchants, making them easily-accessible all throughout the towns.

Repairing gear is a significant gold sink especially in higher difficulties. Since release the repair costs were raised for item levels between 53 and 63.

If you sell an damaged item on the Auction House it will automatically repair when the purchaser moves it to their stash. If the item does not sell it'll be returned to you unrepaired.